Boredom Continues

Equities start the day lower as boredom continueeessss. You’d think, given we are deep in the heart of Tex..umm earnings…that the market would be swinging around more than it has. If I told you the last 6 sessions have seen the tightest range since 1994 would that surprise you? Of course it wouldn’t, you are a savvy investor with your finger on the pulse of market trends. Speaking of trends, it turns out that Vanguard took in $25B in April which is the most EVER for that month. They are at $145B YTD and on track to take in near half a trillion in 2017. Whoa, I’d say we need to buy Valley Forge real estate but I think the culture there is very subdued. Imagine if Hamptons based Hedge funds had brought in $145B YTD….they’d be popping ’75 Mouton like it was Lacroix. Anyway, why are we shocked that markets are super quiet lately? The more passive takes in the less markets should move right? I mean if half the world was sitting in an index fund, and it fell intraday, would it make a sound? You know what else occurs to me? Retail is absolutely piling into this thing. Those Vanguard flows aren’t hedge fund money or sovereign wealth fund money, its mom and pop and brother and sister investing in the market. I don’t wanna hear anymore of this “cash on the sidelines” BS because BILLIONS is going into IceJuice (you like that symmetry?) Hey you know what we get to talk about today? Stocks Man I love talking about stocks. AAPL, ETSY, WTW, GRPN, TWLO, let’s get to it because I can’t contain my sarcasm any longer.

After the open we got a few economic data points but no one wants to talk about the 48th month of mid 50s ISM Services or the 69th month of ADP jobs at 175k, no no no, they wanna talk about ETSY (Baird doesn’t cover). I mean when you sell dream catchers and custom clay pots to as many hipsters as you can find you got yourself a public company. The stock fell 8.5% today after earnings so maybe neon colored yarn is in short supply or oujia board lunch boxes aren’t selling all that great who knows. Other losers included TWLO (-25%), AKAM (-15%), and GRPN (-14%). When’s the last time someone pointed out a GRPN to you? Honestly I can’t even remember, must’ve been that 10% off Charmin toilet paper from 8 years ago. Winners included STRP (+22%, the buyout story that never ends), FEYE (+13%), and WTW (+8%). Why was WTW up? Yep you guessed it, Oprah. Just rename the company at this point….unreal….literally the only reason cited anymore is Oprah. AAPL reported last night and things seem fine. We could talk about their cash pile but at this point I’ve run out of creative ways to describe it. I mean sure, they probably have more cash than the woman who made Fidget Spinners but IT’S HER TIME TO CASH IN (quickly lady….quickly). We fell thru the morning as commodities quivered but by lunch we were smack dab in the middle of that boring range again, 2,383, down 0.3%. You know what occurred to me the other day? I’ve never met a single person who worked at any of the following companies: GOOGL, FB, AMZN, TSLA, AAPL, or NFLX. Now yea, I get it, I live in the Midwest, but I do travel a fair bit. I have a decent sized network having attended Chicago GSB and living in big cities thru most of my 20s and early 30s. I’ve never once met anyone that worked at those companies even randomly in a bar or on an airplane or drinking Mai tai’s on a beach. Seems weird.

The rest of the day was a vol crushing sideways grind back to unchanged. We even had a FED DECISION and nothing happened. I mean at this point we are saving massive market movements for index rebalancing and Ebola breakouts. Now look, usually I would save this kind of thing for my news highlights but you HAVE to read this oral history of Austin Powers because it was a seminal movie in comedy history. The market went nowhere today, it hasn’t gone anywhere for days and days, stop worrying about useless intraday market movement and go read a genius at work.

Final Score: Dow +3bps, S&P500 -14bps, Nasdaq -37bps, Rus2k -60bps.

News Highlights:

Succinct Summation of the Day’s Events: Fed Decision in which they agreed to do nothing. Tons of earnings but apparently earnings don’t move the market anymore. Weakness in commodities though, oil back to March levels (47)

5 things Active Managers should do. This is the one I liked the best: No. 3.Communicate your core philosophy better: Here's a question: What exactly do you do best? What is your core philosophy? Figure out what your special purpose is, and find a way to explain this to your investors (and potential investors) in a compelling and interesting fashion. Failing to do this will simply lead to more and more outflows.

My oh my does the world change fast:"If you are a CMO and you are not in esports in 2017, you are going to risk getting fired," said Tobias Sherman, global head of esports at talent agency powerhouse WME-IMG”

The gift our daughters (and sons) really need: When it comes to money, age won’t make someone wiser or give them confidence if there is no real-world experience backing it up; even having a career won’t. For women, the situation is particularly dire. According to the Global Financial Literacy Excellence Center’s Working Women’s Financial Capability Study, working women lag men in basic financial literacy (31% vs. 52%); the gap is more pronounced in advanced financial knowledge (12% vs. 24%).

Are stocks less risky? (short answer is no): Estimating the probability of permanent loss is far from easy, which is why most investors should focus instead on what they can control: 1) building a diversified portfolio that fits their risk tolerance and timeframe and 2) sticking with that portfolio through inevitable periods of volatility/drawdowns. The best time to think about #1 and #2 are when times are good – when volatility is low and drawdowns are few and far between. During these “good times,” you can think with a clear head and are more likely to make decisions based on evidence instead of emotion. Times are good today. Get busy thinking

Awesome “Earth tour” video accompanied by a song that was actually made for a video game!